Oz Saferooms sees sales surge after tornadoes hit

In the four days after a tornado hit Moore, Okla., in May, Oz Saferooms Technologies Inc. sold 30 of its above-ground concrete storm shelters, generating close to $250,000 in sales.

Oz Saferooms is based in Del City, Okla., but began more than a decade ago at High Tech Rochester Inc.'s business incubator in Henrietta. The company, which is planning an initial public offering, has found itself in the national spotlight in recent weeks.

Since the tornado hit Moore on May 20, representatives from Oz Saferooms have appeared three times on CNN to talk about its storm shelter technology.

Andrew Zagorski, CEO and founder of Oz Saferooms, said the company has received more than 1,000 calls since mid-May and more than 3,000 daily visitors to its website. The firm has orders that take its production schedule through December 2014.

"Seeing the effects of these storms on the news and being here in Oklahoma are two different things," said Zagorski, a Rochester native. "We're getting calls from all over the country from people that are hearing about our technology. Our shelters save lives."

Zagorski came up with the idea for the storm shelters in 1999, after a series of more than 60 tornadoes in the Midwest killed some 40 people and caused more than $1 billion in damage.

The outbreak caused the Federal Emergency Management Agency to announce a nationwide search for a structure that could withstand the devastating effects of an F5 tornado. An F5 is an extremely powerful tornado with winds exceeding 260 mph, capable of lifting houses from their foundations and sending cars skyward.

Zagorski, a career cement form specialist, heard about FEMA's search and began developing the prototype for a single-pour concrete structure. The resulting storm shelter is an aboveground, 20-ton concrete room of 25 square feet with 8-inch-thick walls, an 18-inch-thick ceiling and a 12-inch-thick floor. It is big enough for five people.

The structure was tested at Rochester Institute of Technology, where it withstood a series of tests, including cars dropping on it. Zagorski secured funds for Oz Safe-rooms from more than 175 private investors, mostly in New York. He moved the company to Oklahoma in 2003.

In 2011, the company acquired APEX 1 Inc., a shell company incorporated in 2010, and changed its name to Oz Safe-rooms Technologies.

Last year, Oz Saferooms opened a 90,000-square-foot facility that serves as the company's manufacturing headquarters and training site, where it shows people how to build the shelters.

Oz Saferooms has 16 employees. Zagorski said the company's shelters, which cost $8,000-$11,000 for a larger, handicap-accessible version-are protecting some 500 families in Oklahoma. He hopes that number increases soon with additional funds.

Oz Saferooms recently hired McDermott Will & Emery LLP, a Chicago-based law firm specializing in public companies, to help finalize certain patents and trademarks for an IPO.

"There are more than 50 million homes in the tornado zones," Zagorski said. "We need big funding to be able to handle the demand being caused by these storms."

"It isn't going to be just in the state of Oklahoma. We're getting calls from Texas and Kansas, Missouri, North Carolina, Florida."

Zagorski would not speculate on when Oz Saferooms could go public. Money from a public offering would fund mass production of the company's current residential storm shelters as well as development of larger community shelters for senior homes, businesses, colleges and the type of schools destroyed by the tornado in Moore.

Howard Cragg, owner of H&H Environmental Systems Inc. in Rochester, said he has invested more than $50,000 in Oz Saferooms. Zagorski's leadership and vision have given him a positive outlook on the company and his potential for a return on the investment, Cragg said.

"What Andrew has done with the money from investors is amazing," Cragg said. "He makes the best deal whenever positive.

"I'm 100 percent positive on where this company is going. When it finally goes public and the company has the money to get other plants up and running and start mass-producing these things, it's going to be a great deal for everyone involved."

Zagorski said one obstacle for Oz Safe-rooms has been the red tape that accompanies customers' obtaining government funding to purchase storm shelters. In February, Moore officials posted a letter on the city's website expressing frustration with the delays in obtaining additional grant money from FEMA for storm shelters.

FEMA has provided Oklahoma with funding for safe rooms in the past. The organization allows grants for items such as storm shelters after the president of the United States signs a disaster declaration. City officials said, however, the money often comes too late.

Jim Caruso, a director of Oz Saferooms, said FEMA began providing funding for Oz Saferooms customers in 2003 but has since had trouble managing whether states are getting the funds to the right places.

"FEMA has given rebates to people who have purchased our safe rooms," he said. "But some of that money has also gone to buying other shelters that weren't 100 percent certified. FEMA saw that and started being more cautious about distributing funds.

"I think a lot has changed now with these recent storms. People have seen the results of these aboveground shelters and are much more educated. I think FEMA (is) gaining confidence in potential grant and rebate programs."

After the recent run of tornadoes, counties in north Texas received approval for nearly $1.4 million in grant money from FEMA after a lengthy paperwork process. The grant program provides for a rebate of up to $3,000 on the purchase of a safe room for a qualified home.

The approval of similar programs in Iowa, Kansas, Nebraska, Oklahoma and other states would make it easier for residents to purchase safe rooms, Caruso said. Government funding coupled with a public offering could put Oz Saferooms on track to achieve Zagorski's ambitious goal to exceed revenues of $100 million within six years.

"With just the money raised on a private level, Andrew had done a lot," Caruso said. "With big money we can take this a long way. Auditors have come in and have been really excited about the projections. We're finalizing the final package for an IPO and anticipating a quick turnaround from the SEC."